The CAD/JPY currency pair, which expresses the value of the Canadian dollar in terms of the Japanese yen, has been edging its way toward levels that were seen prior to the start of 2020. As stocks began to sour in February this year, the Canadian dollar also started to fall alongside other commodity currencies. Currencies such as the Japanese yen rallied, which was unsurprising to most traders given the reputation of the yen as a conventional safe haven.

From the start of the fourth quarter of 2019 into the first quarter of 2020, CAD was trading against JPY inside of the range of 80-85, with an approximate midpoint being at the 83 handle (as illustrated below). A stronger CAD is in most cases a constructive for risk assets such as equities, especially when set such strength is against JPY.

CAD/JPY Price Action in 2020

(Source: TradingView. The same applies to all subsequent price charts presented hereafter.)

From the level of 85 down to the lows in March this year at the 74 handle, the midpoint is around 80, which the current market price for CAD/JPY is perched just above. The question now becomes whether we will see further strength.

Certain commodity currencies such as the Australian dollar and New Zealand dollar were able to retrace their steps back to their previous highs (after also crashing in February and March). These two currencies have already rallied against USD and JPY (both conventional safe havens in their own right). The Canadian dollar has struggled against the Japanese yen, although, interestingly, CAD is currently as strong against USD as it was prior to the emergence of the COVID-19 pandemic which shook financial markets (including FX) this year.

USD/CAD Price Action in 2020

(USD/CAD is now trading at similar levels to 2019; the Canadian dollar has effectively won back all its

(Adds strategist quotes and details throughout; updates prices)

* Canadian dollar rises 0.3% against the greenback

* Loonie posts its strongest since Sept. 21 at 1.3257

* Price of U.S. oil settled 5.9% higher

* Canadian bond yields climb across a steeper curve

By Fergal Smith

TORONTO, Oct 5 (Reuters) – The Canadian dollar strengthened
to a two-week high against its U.S. counterpart on Monday as the
price of oil, one of Canada’s major exports, rebounded and the
greenback broadly declined, with investors eying domestic jobs
data later in the week.

The loonie was trading 0.3% higher at 1.3262 to the
greenback, or 75.40 U.S. cents. The currency touched its
strongest intraday level since Sept. 21 at 1.3257.

The currency “has likely got a boost from U.S. dollar
weakness and a rebound in the oil price,” said Colin Cieszynski,
chief market strategist at SIA Wealth Management.

The safe-haven U.S. dollar dipped on optimism that
U.S. lawmakers will agree on new stimulus to blunt the economic
impact of the coronavirus pandemic and after U.S. President
Donald Trump said he would leave the hospital where he is being
treated for COVID-19.

U.S. crude oil futures settled 5.9% higher at $39.22
a barrel, while shares on Wall Street also rallied.

Canada’s trade report for August is due on Tuesday, while
the September employment report is set for Friday.

The jobs report will help show the strength of economic
recovery and whether “the Bank of Canada needs to do anything,
anytime soon or does it stay the course,” Cieszynski said.

The central bank has said it will hold interest rates at
near zero until economic activity returns to full capacity.

Canadian government bond yields were higher across a steeper
curve in sympathy with U.S. Treasuries on Monday. The 10-year
rose 4.7 basis points to

By Miroslava Krufova and Alan Charlish

WARSAW (Reuters) – The Czech crown

looks set to lead the charge as central and eastern European currencies bounce back over the next 12 months from recent losses on hopes of improvement in the global pandemic situation, a Reuters poll found.

September was a difficult month for CEE currencies, with the crown, the Polish zloty

and the Hungarian forint

losing 2-3% as rising numbers of coronavirus cases stoked fears of a damaging second wave.

However, according to the poll of 39 analysts, the crown will gain 4.6% versus Wednesday’s European close to 25.80 against the euro in a year, as pandemic worries calm and the focus shifts back to fundamentals.

“While uncertainty regarding the second wave of the pandemic and regarding the impact of related restrictions on economic activity may last also in the coming weeks, I think the CEE currencies over-reacted with their recent depreciation,” said Radomir Jac, Chief Economist at Generali Investments CEE in Prague.

“The macroeconomic background remains supportive for the view that the Czech crown will recover from its recent losses as soon as concerns regarding the impact of the pandemic moderate.”

In Hungary, where the central bank faces a deep recession coupled with rising inflation, the forint is seen firming 1.4% against the euro to 358.50 in a year. However, expectations are less optimistic than in September when the forint was expected to be the region’s best-performing currency.

“HUF is to remain under pressure mainly because of the flight to safety due to the upcoming uncertainty regarding the U.S. elections and the COVID-19 situation,” said Peter Virovacz, senior economist at ING in Budapest.

“Hopefully the worst will be behind us by the second quarter of 2021 and then we will see some appreciation in the EM